Healthcare Consultants Urge Hospitals and Health Systems to Start Planning for Impact on Physician Compensation and Medicare Payments for Professional Services.
Neal D. Barker, Partner at HSG, a national healthcare consulting firm is the author of “Changes to the 2021 Medicare Physician Fee Schedule Could Have Major Impact on Physician Compensation.” The article is available for download at the website, hsgadvisors.com.
Louisville, KY, Oct. 21, 2020 (GLOBE NEWSWIRE) — HSG, a national healthcare consulting firm, has published a detailed evaluation of the Centers for Medicare & Medicaid Services (CMS) 2021 Medicare Physician Fee Schedule (MPFS) Proposed Rule, which is scheduled to take effect on January 1, 2021, if approved in the Final Rule. The advisors at HSG believe the proposed changes may have a significant potential impact on physician compensation and urge healthcare executives to start planning for these proposed changes. The agency’s Fee Schedule changes cover everything from Work Relative Value Unit (wRVU) values for specific Current Procedural Terminology (CPT) codes to changes in the scope of practice policies for Advanced Practice Providers (APPs) and changes related to CMS’s quality payment program.
With more than a 10% decrease in the MPFS conversion factor, services that do not have any change in Relative Value Unit values will see a decrease in Medicare payment at the projected rate of more than 10%. The decreased reimbursement will not be fully offset by any reimbursement increases realized through the Quality Payment Program paths. Changes related to outpatient and office evaluation and management (E&M) service code determinations and requirements, along with permanent and temporary additions to telehealth codes, will add to compensation complications. The redefined E&M code selection criteria will now be driven by medical decision making (MDM) or time spent alone – with no direct contribution by history and/or exam elements.
“Assuming these changes are included when the Final Rule is published in early December, many industry organizations, consultancies, and provider advocacy groups are projecting significant increases in provider productivity-based compensation if the providers’ E&M profile remains unchanged,” explained Neal Barker, Partner at HSG. “Ultimately, hospitals and health systems may face a situation in which payments from Medicare will decrease while their physician compensation requirements will significantly increase based on the widespread use of wRVU-based compensation models for employed physicians and APPs.”
As the roll-out date for the new Fee Schedule grows closer, HSG is working with healthcare systems to help them gain an understanding of the potential impact on the network. Then HSG works with the organization to build a model to address changes to wRVU targets and bonus conversion factors that yield productive compensation levels that are financially sustainable and uphold fair market value and commercial reasonableness. Coincident with the compensation impact review, HSG conducts a series of provider